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Comptroller Warns Maryland Organizations In Jeopardy Of Losing Federal Tax Exempt Status

Comptroller Warns Maryland Organizations In Jeopardy Of Losing Federal Tax Exempt Status

Citing the tireless and selfless service of Maryland’s nonprofit organizations, Comptroller Peter Franchot today announced that his office recently started sending out letters to alert representatives of local nonprofit organizations that they are in jeopardy of losing or have already lost their federal tax-exempt status for failing to file the requisite Form 990 to the Internal Revenue Service (IRS) for three consecutive years.

Alongside U.S. Congressman C.A. Dutch Ruppersberger and representatives ofMaryland’s nonprofit community, Comptroller Franchot unveiled his campaign to notify organizations that are either at risk of losing federal tax-exemption status or whose status has already been revoked due to failing to comply with a change to the federal filing requirement. A federal law change mandates most small tax-exempt organizations with annual gross receipts equivalent to or less than $50,000 to submit the Form 990 or face revocation of tax exempt status.

"As Maryland’s Comptroller, I want to do everything in my power to ensure that each and everyMarylandnonprofit organization, and its mission, is not placed in jeopardy by this matter," said Comptroller Franchot. "Therefore, my office stands ready to help affected nonprofits resolve their situation and return to good standing, as quickly and as easily as possible."

Prior to 2006, small nonprofits were not required to complete and submit Form 990. However, most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less are now mandated to electronically submit Form 990-N, also known as the e-Postcard, unless they choose to file a complete Form 990 or Form 990-EZ instead. Nonprofit organizations risk automatic revocation of their federal tax-exempt status if they fail to file the requisite form for three consecutive years. Recently, the IRS provided the Comptroller’s Office with a list ofMarylandorganizations in jeopardy of losing their tax exemption.

"The services provided everyday by local nonprofit organizations are vital to the health and safety of countless Marylanders, especially during this difficult economy. It’s our duty to protect these organizations as they help our friends and neighbors. I’m proud to support the efforts of the Comptroller’s Office to bring this important issue to the attention of the nonprofit community," said Congressman Ruppersberger.

Affected organizations can take the following steps to return to good standing with the IRS:

Call the IRS toll free hotline for tax exempt entities, 1-877-829-5500 for the most updated status report;

Visit the IRS website that includes explanations of the process and Frequently Asked Questions, by logging on to www.irs.gov/Charities-&-Non-Profits ;

Contact the Comptroller of Maryland Ombudsman’s Office for answers to general questions at 410-260-4020 or ombudsman@comp.state.md.us ;

Visit the Comptroller of Maryland website at www.marylandtaxes.com and click on the hotlink for At-Risk Non Profits;

Contact the office of yourU.S.Senator or Representative for help navigating the IRS system.

"It is of the utmost importance that we help Maryland’s nonprofits clear up their tax situation — not just for the organizations, but also for the donors who will no longer be able to claim their donations as tax deductions," continued Comptroller Franchot.

 

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